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#1: Japan -- Going where?

Posted on 2006-03-10 01:45:09 by Good Analyst

After several years of zero interest rates as an anti-deflationary
mechanism, the Bank of Japan is now talking about increasing interest rates.
To me it sounds like good news and bad news. The good news is it
demonstrates the faith in the Japan economy's recovery. The bad news is that
the move is bound to deplete some of the enthusiasm and thus returns and
growth may, in turn, be depleted. Read the Washington Post article Japan
ends Anti-Deflation stance.

As far as year-to-date returns is concerned, the MSCI iShares is even (no
gain/no loss) and Fidelity Japan is down over 4% for the year so far. The
question is where we will see these to be at year end. My money is on an
8-12% return for the full year.